Dull sideways consolodation day today. The Dow is now once again looking like the strongest index. Last week, the Dow was lagging behind the SPX and the Nasdaq. While they made new highs, the Dow was still struggling. Today, the Dow made new highs while the SPX and Nasdaq lagged behind.
Today was very choppy. There are no clear impulse waves down, so it implies that today was just a correction. I am expecting new highs soon.
The target for right now is somewhere around 1175-1180.
If we break 1180, it will be very bullish. 1200 could be a given if 1180 is taken out. Here is the daily count:
Basically, this ending diagonal pattern we are in for Intermediate wave (C) has a potential upside target of about 1200. Since waves 2 and 4 connect on a trendlinde, waves 1, 3 and 5 are mostly likely to as well. If wave 5 gets to the trendline, the target is 1200 by the end of the month. 1200 is also a very significant pivot point. Back in the fall of 2008, the break below 1200 had really started the crash. So this will be a key level of resistance if we get up there.
Breaking below 1150 will be bearish.
Also on the daily charts, the MACD and RSI look very extended.
The RSI is currenrtly overbought, and is sitting well above the 70 level. Expect it to diverge if we continue higher.
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